Medicare Premiums Now Deductible by Self-Employeds

A recent pronouncement by the Office of Chief Counsel tells taxpayers that self-employed individuals are entitled to deduct from their self-employment income Medicare premiums paid during the taxable year.  The deduction includes Medicare premiums paid for themselves, their spouse and dependents.

This Chief Counsel Advice (CCA 201228037) further provides that a taxpayer may file an amended return to claim a refund for any open years in which this deduction was not claimed.

Prior to 2010, the instructions to Form 1040 omitted mention that Medicare premiums could be taken as a self-employed health insurance deduction on Form 1040.